SmileDirectClub’s NDAs Required Dissatisfied Customers to Grin and Bear It

  • District of Columbia AG Brian Schwalb settled with SmileDirectClub, Inc. and affiliated entities (collectively, “SmileDirectClub”) to resolve allegations that the online orthodontics company violated DC’s Consumer Protection Procedures Act by using non-disclosure agreements (NDAs) with consumers to suppress negative information and reviews.
  • AG Schwalb’s complaint alleges that SmileDirectClub required consumers to sign NDAs in order to receive refunds, effectively preventing dissatisfied customers from posting negative reviews or speaking poorly of the company. The suppression of negative reviews and information allegedly harmed consumers who purchased the company’s products or services due to distorted, positive reviews.
  • Under the terms of the settlement, SmileDirectClub must pay the District $500,000, provide future refunds without a requirement that consumers sign NDAs, and must release more than 17,000 consumers who have already signed NDAs from their obligations under the agreements.